JEFF PRESTRIDGE: RBS, just dump the charter and sort out your service

When Royal Bank of Scotland launched its customer charter 19 months ago, executives promised a new dawn for its downtrodden customers, one where their interests would come first.

Branch queues would be eradicated, the last branches in town would remain open and product literature would at last be written in plain English.

The bank – primarily owned by the taxpayer – spared no expense in promoting the 25 ‘goals’ contained in the charter, resorting to expensive television advertising (costing millions) to reinforce the message that Royal Bank of Scotland/NatWest post-2008 financial crisis and post-Fred ‘the Shred’ Goodwin was committed to helpful banking.

Down under: Brian Hartzer, former head of retail banking at RBS

To give the charter credibility, the bank said independent consultant Deloitte would be employed to measure its performance against stated goals.

‘Banking should be a balance between the interests of the shareholders, the employees, the customers and the community,’ said Brian Hartzer, then head of retail banking, in launching the charter.
‘If those things are not in balance, the business ends up in trouble.

In Britain, that got out of balance. The focus became shareholder value and it was not even real long-term shareholder value – it was all short term. The other things suffered: customer service deteriorated and the community’s regard for banks deteriorated too.’

He promised ‘serious investment’ in branches and technology.
Yet the charter – in its original form, at least – is no more, as the bank confirmed last week.

Despite a promise made last March by Hartzer in the wake of the bank’s 2011 customer charter results (23 of the 25 goals met) that it would be telling customers about the 2012 charter ‘very soon’, it was never announced.
It was quietly dropped – indeed no literature on the charter was available last Thursday at the NatWest branch in Kensington, West London.

It seems the planned 2012 charter bit the dust as soon as Hartzer departed for a new life in Australia last June – but nobody bothered to tell the customers or taxpayers who helped fund the over-the-top advertising campaign.

According to RBS, Hartzer’s replacement, Ross McEwan, remains committed to ‘helpful banking’, but not the charter with its stated 25 goals.

A bank spokesman said: ‘The charter was a long list of commitments, which didn’t really resonate with customers.
‘But it was successful and useful in galvanising staff. What we now need to look at is what we have learnt from the charter and move towards a shorter list of objectives.’

So was the original 2010 charter a success, or an expensive marketing gimmick?
Well, complaints data from both the Financial Services Authority and the Financial Ombudsman Service indicates that many customers remain seriously underwhelmed by RBS’s commitment to service.

In the first half of last year, nearly 37,000 RBS customers and more than 82,000 NatWest customers made banking-related complaints. Of these, 51 per cent and 67 per cent respectively were upheld in favour of the customer.

As for the Ombudsman where the banks had already rejected customers’ original complaints, 43 per cent of all banking complaints brought against both RBS and NatWest were upheld in favour of the customer (the industry average is 42 per cent).

On the payment protection insurance front, uphold rates of 89 per cent (NatWest) and 87 per cent (RBS) were way above an industry average of 71 per cent. These figures are hardly evidence of the ‘helpful banking’ that the charter was designed to foster.

And who can forget the debacle last year when a computer meltdown at NatWest left people unable to move money or pay their bills? Certainly, none of the eight million customers who were affected.

Only one conclusion can be drawn. As Financial Mail has consistently reported since the charter’s inauguration in June 2010, it was always nothing more than an expensive marketing strategy designed to present the bank in the best possible light.

It was a charter that made boasts about branch opening hours and a commitment to last branches in towns that the bank then breached, resulting in severe reprimands from the Advertising Standards Authority.

On Friday, RBS said the charter was being ‘reviewed’, would ‘relaunch’ in 2013 and ‘continue to be a cornerstone of our drive to improve service’.
Financial Mail’s view is that it should forget the charter – and just sort out customer service.